Minimum wage laws have always had a high price to pay. Essentially, there are a number of costs associated with governments implementing minimum wages on an otherwise free labor market. First, there is the issue of reconciling increased labor costs with static production profits. According to the research, "Minimum wage increases make unskilled workers more expensive relative to all other factors of production," (Gorman 2008). The increase in wages can have the negative ramification of costing more to businesses. Unfortunately, the minimum wage law often creates situations where there are less employment opportunities for the lowest socio-economic classes of mostly unskilled workers. Here, the research suggests that "Employers typically are not willing to pay a worker more than the value of the additional product that he produces," (Gorman 2008). When products cost less to make than an hourly minimum wage, this creates a situation where employers do not want...
Research over several decades has shown that increases in the minimum wage has decreased employment in low-skill labor markets by 1-2% (Gorman 2008) Additionally, when minimum wages increase, they can threaten workers' benefits packages (Gorman). In an age where private healthcare is simply unaffordable for most Americans, low skilled workers depend on their fringe benefits, like insurance and subsidized childcare. Yet, minimum wage laws tend to threaten those benefits. In this regard, many economists believe that minimum wage laws actually do little to rid the nation of the poverty it is plagued by.
However, there are still a number of benefits which makes minimum wage laws practical in an otherwise troubled society, plagued with rampant poverty due to excessive implementation of extreme forms of capitalism. Even though minimum wage laws will always have…
